Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q3 2023 Earnings Presentation
29 slides from Equity Bancshares's earnings presentation, Oct 17, 2023
Slide 1: Earnings Presentation 3rd Quarter 2023
EARNINGS PRESENTATION 3rd QUARTER 2023 Exhibit 99.2
Slide 2: Equity Bancshares, Inc. Corporate Snapshot
Equity Bancshares, Inc. NYSE: EQBK Start-Up: 2002 – 2007 Brad Elliott, Chairman and CEO, founded Equity Bancshares, Inc. in 2002 Completed 5 branch or whole bank acquisitions Opened 2 branches in Missouri Growth: 2008 – 2016 Opened branches in Lees Summit & Overland Park, Kansas Acquired Ellis State
Slide 3: Our Value Proposition
MARKET DIVERSIFICATION AND STRATEGY FOR GROWTH EXPERIENCED AND INVESTED MANAGEMENT TEAM CONSERVATIVE CREDIT CULTURE AND EFFECTIVE RISK MANAGEMENT AND MITIGATION STRATEGIC & DISCIPLINED M&A PARTNER ROBUST FUNDING CAPACITY, ANCHORED BY A DIVERSE, LOW-COST DEPOSIT BASE FOCUS ON EFFICIENT PERFORMANCE TH
Slide 4: Strong Senior Leadership Team
Strong Senior Leadership Team Brad Elliott Chairman & CEO Years in Banking: 34 Rick Sems Chairman & CEO Years in Banking: 34 Founded Equity Bank in 2002 2018 EY Entrepreneur of the Year National Finalist 2014 Most Influential CEO, Wichita Business Journal Served as Chief Banking Officer of First Ban
Slide 5: Long Term Key Strategic Objectives
Long Term Key Strategic Objectives Grow Tangible Book Value Maximize Risk Adjusted Return on Assets Efficiently grow core earnings Effectively deploy capital through share repurchases, dividends and whole bank M&A while maintaining strong capital ratios Re-mix cash flows into higher yielding instrum
Slide 6: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights NET INCOME $12.3 million DILUTED EPS $0.80 TOTAL DEPOSITS $4.1 billion GROSS LOANS $3.3 billion BALANCE SHEET STRENGTH AND EARNINGS CONSISTENCY THROUGH MARKET ADVERSITY NET INTEREST MARGIN 3.51% YIELD ON LOANS 6.67% COST OF DEPOSITS 1.84% DILUTED EPS $0.80 NET INCOME $12
Slide 7: Net Income Drivers
Net Income Drivers Net Interest Income Net interest income totaled $41.0 million in the third quarter, up $1.6 million from the second quarter, driven by an increase in net interest margin. Noninterest Income Noninterest income trended back in line to its normalized run rate after recognized loss of
Slide 8: Performance Metrics
Return on Tangible Common Equity(1) Efficiency Ratio(1) Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. Pre-Tax, Pre-Provision ROAA(1) TCE / TA excluding AOCI(1) Performance Metrics
Slide 9: Quarterly Results: Revenue Trends
Quarterly Results Excludes the impact of net gain on acquisition and branch sales and net gain / (loss) on securities transactions. Including these balances in the second, third, fourth quarter 2022 and first, second quarter 2023 results would be $9,637, $8,969, $8,330, $8,600, and $6,950 respective
Slide 10: Net Interest Income
Net Interest Income Period over Period NIM Period over Period Net Interest Income Key Net Interest Income Drivers Noninterest-Bearing Deposits Noninterest-bearing deposits constitute 23% of total deposits. Loan Yield Loan yield is up 33bps linked quarter, as we continue to originate higher yielding
Slide 11: Strong Core Deposit Franchise
Core deposits excludes time deposits > $100K. Dollars in millions. Current Deposit Composition Core Deposits(1) / Total Deposits Trending Deposit Composition & Loan to Deposit Ratio Strong Core Deposit Franchise
Slide 12: Yield / Cost Components
Cost Analysis Yield Analysis Cumulative Betas Q4 2021 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Average Fed Funds Rate 0.08% 3.65% 4.51% 4.99% 5.26% Loans 34% 36% 40% 45% Deposits 16% 25% 30% 32% Yield / Cost Components
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting classes. As such, the above is not intended to reconcile to the Company’s loan disclosures within the applicable financial statement.
Slide 14: Asset Quality Trends - Quarterly
Asset Quality Trends - Quarterly Includes loans 90+ days past due which are not highlighted in the table. Excludes Bank owned branch assets, totaling $4.2M, classified as Other Real Estate Owned within the Statements of Condition. (1) (2) Nonperforming Assets Net Charge-Offs (NCO) / Average Loans To
Slide 15: Asset Quality Trends – Annual
Nonperforming Assets Asset Quality Trends – Annual Includes loans 90+ days past due which are not highlighted in the table. Excludes Bank owned branch assets, totaling $4.2M, classified as Other Real Estate Owned within the Statements of Condition. (1) (2) Net Charge-Offs (NCO) / Average Loans Total
Slide 16: Allowance for Credit Loss (ACL)
Loan Classification ACL Loans ACL / Loans (%) Commercial Real Estate $13,696 $1,721,761 0.80% Commercial & Industrial $18,960 $585,129 3.24% Residential Real Estate $7,336 $558,188 1.31% Agricultural Real Estate $1,200 $205,865 0.58% Agricultural $1,324 $103,351 1.28% Consumer $1,670 $107,823 1.55%
Slide 17: Investment Portfolio Strategy
Investment Portfolio Strategy Current Investment Portfolio Mix Investment Portfolio Thesis Environment Shift: 2020 -> 2023 As we began 2020, investment portfolio was over 80% Agency MBS and CMOs As rates collapsed, the majority of the portfolio prepaid, leaving the bank with hundreds of millions in
Slide 18: Tangible Book Value
Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. Tangible book value per share(1) increased $0.01 in Q3 2023 Tangible Book Value
Slide 19: Capital Ratios, Dividends and Share Repurchases
Capital Ratio Regulatory Well Capitalized Equity Bancshares, Inc Equity Bank Common Equity Tier 1 Ratio (CET 1) 7.0% 12.65% 14.67% Tier 1 Capital Ratio 8.5% 13.28% 14.67% Total Risk Based Capital Ratio 10.5% 16.42% 15.88% Leverage Ratio 5.0% 9.77% 10.80% Tangible Common Equity Ratio (non-GAAP)(1) --
Slide 20: Outlook
Continued uncertainty of inflation, supply chain disruption and input cost escalation. Focus on continued balance sheet strength and security while continuing to pursue growth. NOTE: Figures presented in this outlook represent forward-looking statements and are not guarantees of future performance a
Slide 21: Focus Variables for Outlook & Forecast
Focus Variables for Outlook & Forecast Economic Environment Business activity creates opportunity for lending and deposit growth. Current macro-environment response and resolution will be a significant driver. Customer Needs Directly related to credit quality as well as trust in our business. Stimul
Slide 22: Market Deposit Share: Kansas and Missouri
Source: S&P Market Intelligence. Equity Bancshares, Inc. pro forma operating market reported above includes all bank locations and counties in which Equity operates Kansas Missouri 21 counties 10 counties 37 branches 16 branches Rank Institution Deposits ($mm) Market Share ( % ) Branches Rank Instit
Slide 23: Market Deposit Share: Oklahoma and Arkansas
Oklahoma Arkansas Kay | Texas | Tulsa Benton | Boone | Carroll 9 branches 5 branches Rank Institution Deposits ($mm) Market Share ( % ) Branches Rank Institution Deposits ($mm) Market Share ( % ) Branches 1 BOK Financial Group $9,111 31.97 21 1 Arvest Bank Group Inc. $4,533 43.48 28 2 Arvest Bank Gr
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations
Slide 25: Calculations of Tangible Common Equity and Related Measures
Non-GAAP reconciliations Calculations of Tangible Common Equity and Related Measures ($ in thousands, except per share data)
Slide 26: Calculations of ROATCE and Efficiency Ratio
Non-GAAP reconciliations Calculations of ROATCE and Efficiency Ratio ($ in thousands, except per share data)
Slide 27: Calculations of ROAA and Return on Average Equity
Non-GAAP reconciliations Calculations of Return on Average Assets and Return on Average Equity ($ in thousands, except per share data)
Slide 28: Forward-Looking Statements
This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of the management of Equity Bancshares,
Slide 29: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com